FDA expects to begin user fee negotiations with generic drug industry representatives this fall, but a completion date was left open, although the timeline could parallel the ongoing Prescription Drug User Fee Act reauthorization.

There seemed to be wide agreement among the groups and agency representatives present that a generic drug user fee was needed during the Sept. 17 public meeting. Both industry groups that presented proposals also shared several ideas, but Mylan Pharmaceuticals departed from that path, proposing different fees that would generate more than four times the annual budget of the Office of Generic Drugs.

Peter Beckerman, senior policy advisor in the FDA Office of Policy, who ran the meeting, said he expected negotiations to begin in November after the public comment period ends. While talks are expected to last several months, Beckerman said there is no scheduled ending date because the potential generic user fee is not beholden to a legislated reauthorization timeline like PDUFA. It would have to be agreed to early in the discussions, he said.

Beckerman also said the PDUFA reauthorization, scheduled to be completed in 2012, may come into play because the generic user fee could be included in the bill.

"If we're looking at an omnibus user fee bill that would reauthorize the prescription drug user fee and establish a generic drug user fee and address medical devices, which is up for reauthorization, we have to be cognizant of the legislative timeframes and the budget timeframes," he said. "What exactly that means in terms of a drop-dead date for negotiations, I simply don't know at this point."

Provisions for a generic drug user fee are in the Obama administration's Fiscal 2011 budget request. The agency formally offered the program four years ago, but has adjusted its thinking since that time. (Also see "ANDA User Fees: Industry Takes Holistic Approach, Wants Whole New Office" - Pink Sheet, 8 March, 2010.).

Previous attempts to reach an agreement on user fees were unsuccessful. CDER Director Janet Woodcock said the agency and industry could not come to agreement on inspection programs.

GPhA, Coalition Expect To Negotiate Together

Before the next negotiating round begins, FDA made it clear it wants a unified industry proposal when both sides arrive at the table, meaning the Generic Drug User Fee Coalition and Generic Pharmaceutical Association likely will have to settle any remaining differences.

The Generic Drug User Fee Coalition, a group of four generic companies not GPhA members, banded together earlier this year to tackle the user fee issue (Also see "ANDA User Fee Negotiations: A Big-Firm Coalition Tackles The Big Backlog" - Pink Sheet, 13 September, 2010.).

The two groups' proposals already are pretty close. Gordon Johnston, GPhA vice president of regulatory science, said the goal is to find as much agreement as possible before meeting with FDA.

"We're in agreement with what needs to be addressed," Johnston said. "When we bring it to an operational level, there will be challenges."

Richard Stec, Perrigo vice president of global regulatory affairs, who represented the coalition, said the two groups cannot enter negotiations with separate entities and be successful. He said they will merge ideas where possible and present FDA options both groups could live with to account for areas of disagreement.

Beckerman said the agency will talk formally with both groups, but expected they would bring a unified proposal.

Both groups supported charging the same amount for all applications. Both also said fees paid for new ANDAs after the program is implemented should not be used to review back-logged applications. They suggested systems that would allow companies to pay a fee to have their back-logged applications reviewed.

The Generic Drug User Fee Coalition said the program should allow for more certainty in application review. The agency should complete 90 % of reviews of original ANDAs within 10 months by the third year of the program. The goal would include time required for outside consulting. The group also wanted complete reviews of 90 % of prior approval supplements within six months and 90 % of resubmissions within three months by year three.

Ninety percent of Type A meetings also should be scheduled within 60 days of request by year two and 90 % of Type B meetings should be scheduled within 90 days of request by year two, the coalition said.

GPhA gave a more general performance framework outline. It agreed a timeframe should be set for complete application reviews and wanted opportunities for meetings and teleconferences with FDA.

Mylan President Proposes Alternative Fee Structure

Mylan President Heather Bresch took the discussion in a different direction. After nearly all the presenters talked about the need for user fees to improve review times and cut into the growing application backlog, Bresch argued a generic user fee program should focus on safety.

The company seemed to revel in its divergent approach; a spokesperson called the plan "unconventional as usual."

Bresch proposed charging establishment fees for any company wanting to do business in the U.S. market or participate in research, development, packaging or other parts of the generic industry. Companies would pay a fee for each facility or establishment they own that are involved.

"The creation of such a fee would not only provide much needed resources to the FDA, it would also provide information to create an accurate database of sites around the world that play a part in making the pharmaceuticals U.S. consumers ingest," she said.

The proposed fee would be tiered based on the type of establishment, but Bresch estimated it could generate $225 million per year.

Bresch also proposed charging an inspection fee to all manufacturing establishments to cover the costs of biennial quality inspections of facilities doing business in the U.S. pharmaceutical market, including foreign sites. That fee could generate $30 million annually, she estimated.

A third fee would be paid annually by each application holder for each active approval they have on file. Bresch considered it necessary to ensure FDA is able to monitor adverse events and approved applications are maintained. She said the product fee could generate $4.1 million per year.

The total annual generic fee revenue estimated by Bresch was $229.1 million not including the inspection fees, more than four times the $53 million annual budget for the Office of Generic Drugs that was included in one presentation.

Mylan's idea would seem to run contrary to arguments that FDA should not be overly dependent on user fees to conduct its business. Bresch also called for increased congressional appropriations.

Bresch expected a two- to three-year phase-in period when asked how she would implement the proposal, but said some fee revenue would have to be collected up front so FDA could hire additional personnel.

-Derrick Gingery (d.gingery@elsevier.com)

GDUFA Timetable Unclear, But Negotiations Will Begin With Lots Of Agreement - Except For Mylan

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